While most fast-food chains were relieved to see the bill to increase minimum wage fail, the CEO of the largest chain in the world feels differently.
No. It’s not McDonald’s CEO. It’s Subway founder and CEO, Fred DeLuca.
DeLuca, who had previously warned that raising the minimum wage too quickly would be a “bad idea,” believes now that wages should rise automatically with inflation,saying, “Over the years, I’ve seen so many of these wage increases. I think it’s normal. It won’t have a negative impact hopefully, and that’s what I tell my workers.”
DeLuca founded Subway nearly 40 years ago, when minimum wage was $1.25 an hour—$9.38 per hour in today’s dollars. Even after the last wage increase in 2010—the first time minimum wage was raised in over a decade—it’s still 20% less than it was in the late 1960s. “I personally think that if I were in charge of the government, I would index the minimum wage to inflation, so that way, everybody knows what they can count on,” DeLuca says. “The employees know they’re going to get increases on a regular basis. The management knows that they’re going to have to pay a little bit more.”
Apparently, not all Subway managers understand this; according to a recent report published by CNN, between 2000 and 2013 individual Subway franchisees accounted for more pay- and hour-rule violations than any other fast-food company. “We, as a company, realize that some of our owners have not done the right thing,” DeLuca admits. “I can’t tell you exactly why, but … we have a lot of first-time business people that enter into business in Subway, and they might not be as sophisticated in what to do.”
For now, all we can do is recognize DeLuca’s effort to support minimum wage workers. But until something is done, the fast food industry will continue to have the largest pay gap between workers and executives, with the top making 1,200 times more than their workers.
